off the leash

Late last year the U.S. Federal Trade Commission (FTC) for the first time poked its nose into the business of native advertising. The regulators issued a statement of guidelines that basically said native advertising, sponsored content, or whatever else you want to call it, needs to be clearly marked as such.

If you are not familiar with the term, native advertising is a modern iteration of what used to be called “advertorial.” The idea is to create content that appears to be “native” to the publication in which it is embedded. So instead of seeing an obviously paid display ad, the advertising content may be delivered as part of a menu of headlines substantially similar to any of the headlines of stories that the publisher’s staff may have written. There are in fact publishers who offer up staff writers to advertisers to make their content look even more “native.”

It is a rather clever solution to two problematic trends in the digital publishing business world.

One is the exposure of traditional advertising as being fairly useless. When publishing moved to a digital format and when we developed the ability to track and measure what readers clicked on, we found that the click rate for the predominate form of online advertising, display, could only be measured in multiples of zero.

For publishers, who are already seeing their print advertising business shrivel, the inability to deliver an effective advertising product online leaves them thinking that the traditional Chinese wall between editorial and advertising might not be as important as survival.

Native advertising is intended to address these two issues. And I think it is pretty clear that the way in which it addresses these issues is by creating a form of advertising that the reader doesn’t really think is advertising. The FTC is likely thinking along the same lines when they comment: “The more a native ad is similar in format and topic to content on the publisher’s site, the more likely that a disclosure will be necessary to prevent deception.”

Advertising industry groups and agencies publically say they support efforts to identify ad content as such. But I’ve heard from more than one publisher who was offered a pretty good payday to place some native ad content without any identifying tags. And that was from the publishers who turned the offer down.  Those who accept it are keeping mum. (Harkens back to the day when a news release would arrive in the newsroom with a $20 bill in the envelope.)

Like most people, I don’t ever really choose to view, read or see ads unless it’s something I go looking for myself. I use ad blockers on my phone and when I go through menus of news headlines if I see something tagged as an ad, no matter how gingerly it is stated (e.g. partner content), I usually click away. So for native advertising to get through to me, you pretty much have to trick me into thinking it’s not what it is.

Some time ago I was involved with a company that created and distributed video news releases (VNRs). As they were originally conceived, VNR’s sounded innocent enough, just like news releases but in video form.  And the makers of VNRs suggested that they were packaged into stories to show the context, much as news releases were written like news articles (by those PR people smart enough to do so).

But the whole gig blew up thanks to usage of the VNR format by the Bush Administration. They put out some VNRs for Health and Human Services in which a paid employee of the PR firm posed as a reporter interviewing HHS execs. When some stations used these VNRs and presented them as news stories they were called out and another regulatory body, the Federal Communications Commission (FCC) got involved.  The FCC made some noise about regulating “fake news” and actually levied a couple fines for VNR usage. The Comcast Network was fined twice for using VNRs as if they were news. Not long thereafter, the VNR pretty much disappeared.

That is a useful lesson is disruption. Not all the disruptors are in Silicon Valley. Some are in Washington. And those are the ones that carry the biggest sticks.

I don’t expect native advertising to disappear as quickly as the VNR did, although it could also fall in to the “fake news” category. Its survival depends on a level of transparency that is the only way to keep the regulators at bay. And if they are going to be upfront about it, the advertising world needs to find a way to actually produce content that some audience really wants to see and read.